guideline-chile

How to hire and pay employees in Chile

With Instahirin, your business can easily hire employees in Chile. No more worrying about local laws, complex tax systems, or managing international payroll.

Before hiring

EMPLOYEES IN The Chile

Before hiring employees in Chile, one key thing employers should be aware of is compliance with Chile’s Personal Data Protection Law (Law No. 19.628). While not as extensive as the EU’s GDPR, this law requires that employee personal data be collected and processed with the individual’s consent, and handled in a manner that ensures confidentiality, accuracy, and security, especially in cases of international data transfers.

Another crucial consideration is Chile’s Labor Code and mandatory benefits system. Employers must contribute to social security, which includes pension funds (AFP), health insurance (FONASA or private ISAPRE), unemployment insurance, and work-related accident coverage. Employees are entitled to paid annual leave (at least 15 working days), sick leave (with medical certification), public holidays, and parental leave (including maternity leave of 18 weeks and postnatal parental benefits). Employment contracts must be in writing, outlining job responsibilities, wages, and terms, and must comply with Chilean labor regulations, including those covering termination and severance procedures.

At a glance

CURRENCY

CLP

OFFICIAL LANGUAGE

Spanish

PAYROLL FREQUENCY

Monthly

PUBLIC HOLIDAYS

19

(based on region; see here)
EMPLOYER TAXES

5%

of gross salary
13th / 14th SALARY

N/A

Good to know

Chile has a dual healthcare system, consisting of the public FONASA system and private ISAPREs. Healthcare is funded through a mandatory 7% deduction from employees' gross salaries. Workers can choose between public and private providers. Many employers offer private health plans to supplement coverage and ensure quicker, higher-quality services.

The standard workweek in Chile is 45 hours, typically spread over 5 or 6 days, with a maximum of 10 hours per day. Overtime is permitted and must be paid at 150% of the regular hourly rate. Employees are entitled to 15 working days of paid annual leave after completing one year of service, plus 15 national public holidays each year.

Labor laws in Chile

Working hours and overtime


Standard working hours are 9 hours per day, 45 hours per week. The standard workweek is from Monday to Friday.

Employment contracts


Contracts must be in Spanish and can be bilingual. They must be in writing and signed by both parties. A contract must include:

  • Name
  • Start date
  • Length of the employment
  • Job description
  • Remote work conditions

Probationary period


There is no probation period in Chile.

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Benefits and leave in Chile

Annual leave in Chile


In Chile, employees with at least one year of service are entitled to 15 working days of paid annual leave, including at least 10 consecutive days, while those in remote southern regions receive 20 days . After 10 years of service, workers earn one extra day every three years, and unused leave can be carried over for up to two years or paid out only upon termination

Sick leave


In Chile, employees are entitled to paid sick leave with a valid medical certificate submitted within 48 hours. The health insurer (Fonasa or Isapre) pays the employee's salary during the leave. There is no fixed limit on duration, and job protection is provided throughout the sick leave.

Parental leave


Mothers who have taken maternity leave are entitled to further parental leave. They may choose one of the following options:

  • An additional 84 days of full-time leave.
  • An additional 144 days of half-day leave. In this case, the employee only works for half of the working day, and the other half is spent with the child.
  • An additional 84 days that is shared with the father of the child. The employee must notify the employer of this at least 30 days before the end date listed on the post-birth license.

No medical certificate is needed for parental leave. The choice of parental leave is completely up to the employee and cannot be influenced by the employer.

This leave is paid for at 100% of the employee’s regular salary by the healthcare system.

Holidays


Chile observes 18–19 public holidays annually, including major dates like Independence Day (September 18–19) and Christmas (December 25). Five of these are mandatory holidays when most businesses must close by law.

Employer tax

In Chile, employers typically contribute around 4% to 5% of an employee’s gross salary for unemployment, accident, and disability insurance. Additional risk-based surcharges may apply, depending on the industry.

Individual tax

In Chile, resident individuals pay progressive income tax ranging from 0% to 40%, based on income levels. Employees also contribute around 17.6% to social security, leading to a total personal tax burden of approximately 20–25%.

Termination in The Chile

Terminations in Chile can be complex. There is no at-will termination in Chile for employers. Employers must ground terminations on a company-related business need. Compliant terminations include:

  • Voluntarily by the employee
  • By mutual agreement
  • By the expiration of the contract

After the end term, the employer must confirm in writing to the employee that the agreement won't be renewed for fixed-term contracts.

Notice period


The minimum notice period is 30 days. The employer can also provide payment in lieu.

Start hiring employees in
Chile

Setting up a business entity in every country where you want to hire isn’t scalable it’s time-consuming, expensive, and legally complex. In Chile, employers must navigate strict labor laws, mandatory benefits like health insurance and severance, and complex tax and social security obligations. Ensuring compliance with employment contracts, working hour regulations, and payroll requirements can be challenging. Manual HR and payroll management increases the risk of compliance breaches and administrative inefficiencies.

With InstaHirin, you can easily manage HR, payroll, and automate compliance in Chile and 180+ countries all from one user-friendly platform so you can hire quickly and confidently without setting up a local entity.

Disclaimer: The information provided in this resource is for general educational purposes only and shall not be construed as legal advice. While InstaHirin yster strives to provide current and accurate information, InstaHirin makes no warranties or representations as to the correctness of the content provided and accepts no liability or responsibility for any errors or omissions in the content provided. By using this resource you acknowledge and agree that you do so at your own risk. The content of this resource is subject to change without notice.

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